Do you want to pay off your credit card debt faster? I know your answer would be a big YES. If you feel like you are buried under the credit card debt and want to be free from this kind of bad debt, start making goals now.
You should start paying your credit card debt as soon as possible. This will not happen overnight and requires considerable planning and determination.
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Paying credit card debt is a mounting task and it is not easy. But it can be done. If you will make a plan and start paying it off and stick to it, you will definitely be free from credit card debt.
How to get out of debt when you totally broke
Face the Numbers Head-On
Gather all your credit card statements to create a comprehensive picture of your outstanding debts. List each card with its balance, minimum payment, interest rate, and due date.
Many people avoid this step because the reality feels scary, but you can’t solve a problem you haven’t properly defined.
Knowledge is power, and this information becomes your roadmap to freedom.
Choose Your Debt Elimination Strategy
Two popular methods can guide your payoff journey. The debt avalanche method focuses on paying the minimums on all cards while allocating extra money to the card with the highest interest rate first.
This saves the most money over time. The debt snowball method targets the smallest balance first, creating psychological wins that build momentum.
Choose the approach that matches your personality and stick with it.
1. Change your mindset
The foremost thing you need to do is change your mindset about using credit cards. If you continue to think that you can shop with your credit cards at any time and whenever you want, you will remain in debt.
Credit card debt is always very high-interest-rate debt, which means you have to be very careful about how you use your cards.
2. Totally stop using your credit cards
This might seem obvious, but it’s the most crucial step. You can’t fill a bucket with a hole in the bottom. Put your credit cards away, freeze them in a block of ice, or cut them up entirely.
Switch to cash or debit cards for all purchases. The temptation to use available credit will sabotage every other effort you make.
This way, you won’t be tempted to use your credit cards for purchases when you don’t have money.
If possible, cancel your credit cards after paying off all your debt. To eliminate debt, you should stop accumulating more debt. Pay cash for your necessities instead of using plastic.
3. Make goals for paying off debt
Now, set relevant goals based on your debt and the amount you can spare to pay it off.
As with anything else in life, you need SMART financial goals for paying off your debt. As you know, SMART goals are Specific, Measurable, Achievable, Relevant, and Timely.
Specific: Make your goals specific, rather than giving a general statement. ” I will get out of debt ” is a very general statement; be specific about that. ” I want to get out of credit card debt,” and be more specific if you have more than one type of debt. I will pay off the (name the particular credit card) first. This is a specific goal to pay off a certain credit card.
Measurable: ” What gets measured, gets managed”. Write down the particular amount you want to pay from the above credit card. That will be your measurable goal.
Achievable: For example, if you have a debt of $5000 but you are left with only $100 each month, you cannot pay that amount in 2 or 3 months. Keep your goal achievable by making a certain amount of repayments each month or better, each week.
Relevant: Relevancy of goals is essential and if you feel like paying off debt is not possible, generating more income could be a goal for you at this time, And then you may find that paying the debt is easy for you with increased revenue.
Timely: You would agree with me that goals should be time-bound. Time-bound goals keep you determined because you have to accomplish the given goal in a given time. As of now, we are taking the example of eliminating the debt on this particular credit card. You cannot just write down, ” I will pay the debt on this credit card”, you will be paying a set amount of money in a set time. Say you will pay this in one year. Now this goal has a time limitation, it will be easy to figure out how much you need to pay in a single month to pay off this debt.
⭐Pro tip: Make goals and stick to them with a determined action plan
4. Cut your expenses
If you want to stay debt-free, cutting expenses will be of great help. Spending money only on your basic needs will help you spare some money to pay off debt. Create an airtight budget that will help you save money, which can be paid towards your credit card debt.
Do not plan any vacations and travel for now. Put every dollar towards your debt repayment.
5. Track your spending
At this point, your main goal should be to free some money to pay back this high-interest debt. If you can free even a few dollars each month, it would help pay off some of the money. Tracking your spending gives you some insights into your spending habits. When you know where your money is going, it becomes easy for you to cut your expenses.
Any expense that is not a need could be controlled. You may feel like your outings and entertainment is reduced, but remember, it is for a shorter period. You will be able to enjoy your life fully when you have cleared all your bad debts.
How to grow your wealth by tracking your expenses
6. Pay one type of debt first
Tackle one credit card debt first. If you pay the smallest debt first, it will give you the motivation to attack the next debt.
And if you pay the highest interest rate debt first, you will put a halt to the fastest-growing debt.
Choosing any method to pay off your debt is a personal choice. Both methods work. It depends on your attitude towards money and your plans for eliminating the debt.
7. Consolidate your debt
Consolidation will combine all your debts into one place, making it easier to pay one debt instead of multiple instalments.
Moreover, credit cards often have very high interest rates, making it challenging to keep track of your payments.
Consolidating your debt at one place saves you from further debt as it also helps in lowering your interest rate.
8. Look for any spare money
Look for the ways you can generate some money. You may have some items lying in your house that you don’t use, sell them and put that money towards debt repayment.
If you have some savings or are saving money for a purchase or holiday, practice delaying gratification and use that money to pay off your debt.
I know what you may be thinking, what if you need money for any emergency?
However, consider the interest rates you will be earning from banks and the interest rates you will be paying on credit cards. There is no sense in saving money and paying substantial interest rates on credit cards.
9. Keep up with your repayment plan
Whichever way you are using to pay your credit card debt, keep up with it because if you do not stay consistent in your repayment plans, it will be difficult for you to keep up with your repayment goal.
Just keep going and don’t stop.
10. Talk to your credit card companies/institutions
This could be one of the options if you want to pay off your credit cards. Talk to your providers as they can help you in repayments.
Credit card companies have a system in place if you are unable to pay your outstanding amount. In most cases, they will assess your situation and can help you by
- Reducing your repayment amount
- Reduce your interest rate for a period
- Give you some time to let you stand on your feet
For this, you need to discuss your hardship and your willingness to repay the debt with them. Credit card companies are more than happy to make adjustments to recoup their losses.
11. Refinance your mortgage
Refinancing your mortgage can help you save some money. Even if you get a slight reduction in interest rate, you can save some money each month. The saved money can go towards your debt repayment.
Maximize Your Payments
12. Pay More Than the Minimum Every Month
Minimum payments are designed to keep you in debt longer. Even an extra $25 per month makes a significant difference.
If you only pay minimums on a $3,000 balance with 18% interest, you’ll pay over $1,900 in interest over 11 years. Double that payment and you’ll be debt-free in under three years while saving over $1,400 in interest.
13. Make Payments Twice a Month
Instead of one monthly payment, split it in half and pay every two weeks. This simple change reduces your average daily balance, which is how credit card companies calculate interest charges.
You’ll also make 26 payments per year instead of 12, effectively making an extra month’s payment annually.
14. Apply Every Windfall to Debt
Tax refunds, work bonuses, birthday money, garage sale proceeds, every unexpected dollar should go straight to your credit card debt.
These windfalls won’t come regularly, so treat them as opportunities to eliminate debt rather than as shopping sprees. A $1,200 tax refund applied to debt saves you hundreds in future interest payments.
15. Round Up Your Payments
Round every payment to the nearest $50 or $100. If your minimum payment is $127, pay $150. This small increase adds up quickly and creates a habit of paying more than required.
The psychological benefit of round numbers also makes budgeting easier and payment tracking cleaner.
Find Extra Money in Your Budget
16. Cancel Unused Subscriptions and Memberships
Review your bank and credit card statements for recurring charges. That gym membership you never use, streaming services you forgot about, or magazine subscriptions gathering dust, cancel them all.
Most people discover $50-200 in monthly subscriptions they can eliminate. Redirect these payments to your debt.
17. Temporarily Slash Your Entertainment Budget
Eating out, movies, concerts, and other entertainment expenses can be dramatically reduced without eliminating fun.
Cook at home, host potluck dinners, find free community events, and use the library for entertainment.
This doesn’t have to be permanent, but even six months of reduced entertainment spending can significantly accelerate your debt payoff.
18. Sell Items You Don’t Need
Walk through your home with fresh eyes. Electronics, furniture, clothes, books, tools, and sporting equipment gathering dust can be converted to cash.
Online marketplaces make selling easier than ever. Set a goal to earn $500-1,000 from selling possessions and apply it all to debt.
You’ll declutter your space while advancing your financial goals.
19. Take on a Side Hustle
The gig economy offers numerous opportunities to earn extra income. You can drive for rideshare services, deliver food, freelance your skills, tutor students, or walk dogs.
Even earning an extra $200 per month can significantly reduce the time it takes to pay off your debt.
Select something that aligns with your schedule and skills, and dedicate the earnings entirely to debt elimination.
Reduce Your Interest Burden
20. Call Your Credit Card Companies
Many people are unaware that they can negotiate with credit card companies. Contact each company and request a lower interest rate. Be polite but persistent.
Mention your payment history, length of relationship, and any competing offers you’ve received.
Even a small reduction in interest rates can save hundreds of dollars over the life of your debt.
21. Consider a Balance Transfer
Balance transfer cards offer promotional periods with 0% or low interest rates, typically for 12-21 months.
If you qualify, transferring high-interest debt to these cards can provide breathing room to pay down principal faster.
However, balance transfers aren’t magic, you need discipline to pay off the debt during the promotional period and avoid accumulating new balances.
Optimize Your Approach
22. Use the Debt Avalanche for Maximum Savings
If you’re motivated by numbers and long-term savings, focus on the debt avalanche method. List your debts by interest rate and tackle the highest rate first, while paying the minimum on the others.
This mathematically optimal approach minimizes total interest paid.
Track your progress with a spreadsheet to see how much interest you’re avoiding.
23. Try the Debt Snowball for Psychological Wins
If you need motivation and quick victories, the debt snowball method is more effective. Pay minimums on all debts except the smallest balance, which gets every extra dollar.
When that debt is paid off, roll the payment into the next smallest debt.
The psychological boost of eliminating entire debts creates momentum that keeps you motivated through the journey.
24. Automate Your Payments
Set up automatic payments for at least the minimum amount on each card to avoid late fees and potential damage to your credit score.
If possible, automate larger payments that align with your debt elimination strategy.
Automation removes the temptation to spend that money elsewhere and ensures consistency in your approach.
25. Time Your Payments Strategically
Credit card companies report your balance to credit bureaus on specific dates, usually your statement closing date.
If you make a large payment right before this reporting date, it can improve your credit utilization ratio and potentially boost your credit score.
A better credit score opens doors to better balance transfer offers and personal loan rates.
Stay Motivated and Accountable
26. Track Your Progress Visually
Create a visual representation of your debt payoff journey. Use a thermometer chart, a debt-free calendar, or a smartphone app to track your progress.
Seeing the numbers drop and celebrating milestones keeps you motivated during challenging months. Share your progress with supportive friends or family members for added accountability.
27. Plan Your Debt-Free Celebration
Decide how you’ll celebrate once you’ve eliminated your credit card debt. Maybe it’s a weekend getaway, a nice dinner, or simply the satisfaction of redirecting those payments to savings.
Having a specific reward in mind motivates during challenging moments. Make sure your celebration doesn’t involve taking on new debt.
How to stay debt-free after repaying all the bad debt?
After paying all the debts, your main goal should be to repay your mortgage. It cannot be paid in a very short time. It takes time, so make a plan to repay your mortgage.
To remain debt-free ( from credit cards) you should make a solid plan.
1. Create an emergency fund
I assume that you used all of your funds in repaying the credit card debt. Now is the time to create an emergency fund for your future. You may need funds immediately for any medical emergency, or you may need to change your job.
2. Cancel your credit cards
If you know yourself and you may again get trapped in credit card debt, cancel all of them and totally stop using plastic. High-interest rates and annual fees can again accumulate as bad debt.
3. Create a strict budget
Create a budget and stick to it. Your financial condition does not depend on how much you earn rather it depends on how much you spend. If you will stick to your budget, it will keep your spending in control.
4. Make financial goals and accomplish them
As with any other area of life, having financial goals is essential to stay on track with your financial situation.
If you are looking for increasing your income to pay off your debt, you can start by earning some extra income through surveys. I know you will not become rich but earning a few hundred dollars each month will help you reduce your debt faster.
I hope this will help you reduce your credit card debt and grow your wealth in the long run.
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